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LDCC Holders Receive First Royalty Payout

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LDCC Holders Receive First Royalty Payout

Royalty Payout

A pair of companies has just announced the successful disbursement of royalties from a digital security; This would be Securitize and Lottery.com.

This royalty payout is a prime example of the potential behind digital securities.  Due to lock-up periods, and simply establishing the building blocks of the industry, we are now seeing this potential come to fruition.  This royalty payout is proof of what industry players have been touting as the future of investing – a more efficient and flexible environment, underpinned by blockchain based technologies.

Securitize notes that holders of the Lottery.com token, LDCC, are able to retrieve their earnings by simply clicking on a link, and choosing their method of payout (USD, USDC, etc.).

Markets

For those interested, and eligible, to trade LDCC tokens, look no further than Open Finance Network.  Here, the tokens have a home in which investors have access to greater liquidity surrounding the asset through OFN’s secondary markets.

While various companies have been working to establish themselves within the digital securities sector, one area lacking, to date, is the presence of active exchanges.  While this may have been, simply, due to a lack of tradable assets, times are changing.  Beyond Open Finance Network, we have seen companies like MERJ, and most recently, Tokenised Stock Exchange, join the fray.

Tokenise Stock Exchange Goes Live

Commentary

Upon announcing the dividend payout, representatives from each, Securitize and Lottery.com, took the time to comment.

Carlos Domingo, CEO of Securitize, stated,

“We couldn’t be more excited and proud to execute our first royalty payment for Lottery.com, a company that has been a big proponent of digital securities from the beginning…This first payment is significant for all of us in the industry. It’s another great step in modernizing capital markets by enabling digital securities. We firmly believe the future of all assets is digital.”

Matt Clemenson, CCO of Lottery.com, stated,

“Leveraging Securitize’s infrastructure for distribution of the royalty was a no brainer for us. They make it so easy to pay all of our token holders in the way that they want to be paid.”

Stablecoins

Of note in their announcement, is the usage rate of stablecoins.  Securitize indicates that of those receiving royalty payouts, roughly 50% chose to receive this in the form of USDC.

This choice is a positive, yet unsurprising, development.  We, along with many others, have noted the bright future of stablecoins.  Furthermore, any investors utilizing digital securities, are undoubtedly going to be aware of the benefits which stablecoins can afford.  Between this knowledge, and potential within the product itself, it wouldn’t be a stretch to see that 50% continue trending upwards.

Lottery.com

Founded in 2015, Lottery.com maintains headquarters in Austin, Texas.  Above all, Lottery.com operates to bring positive social impact.  This is achieved through ‘gamifying’ lotteries, sweepstakes, and more.  The company was notably one of the earliest adopters of blockchain, and digital securities.

CEO, Tony DiMatteo, currently oversees company operations.

Securitize

Founded in 2017, Securitize is based in the United States.  Since launch, the team behind Securitize continues to develop a comprehensive suite of services meant to grow the digital securities sector.

CEO, Carlos Domingo, currently oversees company operations.

In Other News

In recent months, Securitize has been on a roll.  During this time, we have reported on various new features and services developed by the company, as they look to continue growing the digital securities sector.  The following articles touch on a couple of these developments, as Securitize addresses both, trading and compliance, measures.

Securitize iD to Bring new Efficiency to KYC Practices

Securitize Utilizes ‘Atomic Swaps’ to Facilitate P2P Trading of Digital Securities

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Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

Digital Securities

What is Tether? A Look at the World’s Most Popular Stablecoin

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What is Tether? A Look at the World’s Most Popular Stablecoin

Tether (USDT) is the world’s most popular stablecoin. As such, it serves multiple purposes in the market making it a core cryptocurrency in many investor strategies. While it may be impossible to envision a crypto market without Tether, this hasn’t always been the case. The Tether project overcame much controversy to make it to the top spot.

Nowadays, Tether helps to provide liquidity and a hedge against market volatility. It’s able to accomplish this task because it is what’s known as a Stablecoin. Stablecoins are blockchain instruments that have their value pegged to outside commodities.

Advantages of Stablecoins Like Tether

The advantages these coins bring to the market are undeniable. For one, their stability helps curtail the volatility of cryptocurrencies as a whole. Investors depend on stablecoins as a way to escape bearish markets without converting funds back into fiat currencies.

In most stablecoin scenarios, the token will have its value pegged to a fiat currency. In the case of Tether, USDT shares its value with the US dollar. In essence, 1 USDT is worth $1. Additionally, anyone can choose to redeem their 1$ of fiat currency through Tether Unlimited at any time.

Tether Supply Graph - Bitcoin News

Tether Supply Graph – Bitcoin News

Interestingly, Tether helped to spawn a new class of stablecoins. Today, there are multiple fiat stable coins. Additionally, there are stable coins pegged to nearly every major commodity. There are coins pegged to the value of gold, diamonds, and even oil.

History of Tether

The history of Tether begins with the Realcoin project. Realcoin entered the market via its whitepaper in July 2014. The whitepaper caused a huge stir amongst the community for several reasons. Aside from its revolutionary technical aspects, the paper’s publishers are some of the most reputable names in the market. Specifically, Tethers whitepaper lists co-founders Brock Pierce, Reeve Collins, and Craig Sellars.

Interestingly, the Realcoin name didn’t last very long. In November 2014, the Santa Monica based startup decided it was time to dawn a new title – Tether. Notably, Tether entered the market with a three-pronged approach.

The platform introduced three stablecoins as part of its entry strategy. The first coin was USTether. This token featured a 1:1 peg with the US dollar. The second coin pegged its value to Euros, and the last coin focused on the Japanese Yen, the latter being known as YenTether.

First Exchange Listing

Bitfinex became the first exchange to introduce Tether into its platform in January 2015. Instantly, stablecoins became a success. The exchange saw huge user activity regarding this token. Consequently, Bitfinex became the leading exchange in terms of Tether trading.

Bitfinex Connection

It wasn’t long before researchers began to question Tether’s solvency. It was the first stablecoin in the market, and its unprecedented rise to success was not without concern. These concerns led researchers to delve deep into the Tether Bitfinex connect.

In 2017, a group of independent researchers from the International Consortium of Investigative Journalists released the Paradise Papers. This document confirmed some of the worst fears of those in the market at the time. The documents showed that both Tether and Bitfinex shared the same management and corporate structure.

Researchers discovered that both entities listed the same Chief Executive, chief financial officer, chief strategy officer, and general counsel in their corporate documentation. The founder of Tether, a graduate of Yale University, Philip Potter, also handled the major operations of Bitfinex.

The report went on to detail how the two companies were really more like one conglomerate. The documents demonstrated how the majority of Tether accounts entered the market on the Bitfinex platform. Furthermore, these researchers went as far as to label Tether the driving force behind the 2017 crypto break out year.

Bull Run

Those that credited the inflow of USDT into the market as one of the key factors behind the 2017 bull run began to make their voices heard. Another research paper published the following year titled ‘Is Bitcoin Really Un-Tethered?’ takes an in-depth look at the effects of Tether within the crypto sector.

The researchers behind this paper, John M. Griffin and Amin Shams are well-known academics from the University of Texas. Their research concluded that Bitfinex and Tether worked together to artificially bump Bitcoin prices. The two allege that Bitfinex supplied the market with Tether in a bid to create an influx of liquidity.

These USDTs would then flow into a myriad of cryptocurrencies. However, when the value of these smaller coins would decline, most investors bought back into Bitcoin. It’s these actions, that researchers claim fueled Bitcoin’s epic $20,000 bull run.

Tether Issuance Graph - Tetherreport

Tether Issuance Graph – Tetherreport

To make matters worst, the researchers were not alone in their assumptions. The creator of Litecoin, Charlie Lee made a Nov 30 Twitter post were he appeals to the market to exercise caution. Specifically, Lee posted:

“There’s a fear going on that the recent price rise was helped by the printing of USDT (Tether) that is not backed by USD in a bank account.”

Questions Arise

As the negative press began to mount for Tether, they began to catch the attention of regulators. On December 6 of the same year, the U.S Commodity Futures Trading Commission sent multiple subpoenas to both Bitfinex and Tether. In the subpoenas, the New York Attorney General alleged that Tether illegal allocated funds to cover up to $850 million in losses.

Banks Join

This negative press eventually led the firm’s banking partnerships to exit. In the latter part of 2017, the platforms lost the US Bank and Wells Fargo as banking partners. While this was a major blow to operations at the time, it wasn’t long before Tether found friendlier banking relationships in pro-crypto countries such as Taiwan.

How Does Tether Work?

It sounds easy pegging a cryptocurrency to the price of a real-world asset. However, the task is notoriously difficult for many reasons. To accomplish this task, Hong-Kong based Tether Limited originally claimed that for every ASDT issued, the firm held an equivalent amount of dollars kept in reserve.

As USDT issuance got into the billions, these claims came under heavy scrutiny. In March 2019, the company changed the backing of USDT to include loans to affiliate companies. Despite the change, Tether remains the top stablecoin in the world.

Omni

USDT is unique in that it functions on the Omni blockchain protocol. Omni is a versatile platform that is most famously known for its Bitcoin anchoring capabilities. Currently, Omni provides this service to multiple firms.

In its earliest days, every Omni transaction featured a dual recording strategy that would place the entry on both the OMNI system and record it in a Bitcoin transaction sharing the same transaction hash.

Omni Today

Today, Omni assets feature pegs on multiple blockchains. Notably, there is an Omni layer of Litecoin. More recently, developers introduced additional ERC-20 variants of the tokens. All of these variations help to further secure Tether and demonstrate its adaptability in the market.

Why Tether is Important

Tether is one of the most dominant cryptocurrencies in the market. It provides investors with additional flexibility as it serves as a dollar replacement on many popular exchanges. Here are just some of the reasons Tether continues to see adoption:

Exit strategy

Market volatility is a major concern in the crypto sector. When the bears start to take over the market, investors only have a few options to consider. They can sell their holding and convert them back into fiat. This process is time-consuming and involves the most fees possible. Or they can ride the bear market out and take the losses. Tether adds a third option to the equation. Convert to Tether and avoid the fees and volatility.

Reduce friction

Since Tether is another blockchain asset, converting from Bitcoin or any cryptocurrency into Tether is as easy as exchanging Bitcoin for Ethereum. This conversion introduced a frictionless way for investors to avoid volatility and remain in the cryptomarket

Remittance

As with most cryptocurrencies, Tether has the ability to revolutionize international transaction systems. USDT can be sent anywhere globally without the need to convert funds or pay extra transference fees. The point is that Tether is as easy to send as Bitcoin globally.

Accounting

Another major advantage of using Tether as a means of payment is accountability. Since its inception of Bitcoin, there has been confusion surrounding its use as payment in terms of accounting. Businesses that pay for goods or services with crypto are often left to estimate the value of their payment against the US dollar. Stablecoins eliminate this concern because they always equal their fiat counterparts.

Transit Cryptocurrency

Importantly, Tether facilitates the transfer of real cash into digital cash. This is a major task in some regions of the world. Remember in some locations it’s a difficult task to convert crypto into fiat currency. In some countries the practice is illegal. For all of these regions, Tether is a smart alternative.

Acceptance

Along the same line of thought, Tether provides exchanges with increased liquidity. This token allows exchanges to forgo dealing directly with fiat currency. In this way, exchanges can reduce the amount of KYC and AML regulations their platform must meet.

Tether is Here to Stay

After so many successful years in the market, no one can argue the important role Tether holds. Nowadays, there is no shortage of stablecoins in the sector. However, Tether was the original stablecoin that started this revolution. For that, Tether deserves a nod of appreciation.

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Digital Securities

FinTech ‘Unicorn’ Revolut Shows Positive Growth in 2019 Annual Fiscal Report

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revolut

Revolut, a tech ‘unicorn,’ and one of the more promising FinTech platforms on the market today, has recently released its annual fiscal report.  The annual fiscal report touches on the various accomplishments, setbacks, and financial markers surrounding the company’s operations throughout the 2019 fiscal year.

By the Numbers

Revolut has various developments to share, and the numbers seem to be trending in a positive direction.

The following is one key metric provided, which demonstrates the direction that its decisions have resulted in – active users.

  • 2018 : 3.5M
  • 2019 : 10M
  • 2020 : 13.5M and counting

As its user base increases, so do its cash holdings on the users’ behalf, with this total jumping from £903M in 2018 to roughly £2,281M in 2019.

Furthermore, Revolut notes a substantial increase in 2019 revenue vs. 2018 (£162.7M vs £58.2).  Of course, larger operations also result in great operational costs.  Revolut witnessed a substantial jump in revenue as well as a tripling of operational costs over the same time frame, jumping to £107.4M in 2019 from £34.01M in 2018.

While expansion into new markets may be fuelling this jump in revenue, expansion has been made possible in the first place by a series of successful capital raises.  Revolut successfully raised £580M in investments in the first half of 2020 alone, and we expect to see additional funds raised.

Service Expansion

Undoubtedly, various platform features implemented over the course of 2019 are also responsible for a portion of Revolut’s growth.  A few examples of these include:

  • Support for Apple Pay
  • Commission free trading of U.S. listed stocks
  • Expansion to Singapore, Australia*, United States*, Japan*

*launched in beta

Looking Forward

Despite not turning a profit, 2019 was an overall positive year for Revolut, considering its ongoing desire for global growth.  Looking forward, the company has already established a game plan to ensure profits are one day realized.  The following is an excerpt from the fiscal report, touching on what these plans entail.

  • Future investment in the technology infrastructure and development of the core product offering to Revolut customers,
  • Continue to operationalize Revolut Bank UAB and the roll-out across other European markets,
  • Obtain further regulatory authorizations required to expand our product offering across jurisdictions,
  • Develop existing operations in international jurisdictions including North America and Asia Pacific whilst continuing to expand our operations across the UK and EEA,
  • Further investment in the customer support, risk and compliance infrastructure

Canadian Expansion

Whether looking at the revenue or losses sustained in 2019, each can be largely attributed to a desire for global expansion.  Revolut has established a strong foothold in both the United Kingdom and Europe and has plans for expansion.

One example is the company’s anticipated entrance into Canada.  Although Revolut has not provided an anticipated launch date for Canadian services, interested users can currently join a waitlist for early access.

When this entrance inevitably occurs, Revolut can expect strong competition from various other FinTech outfits establishing themselves in Canada.  We recently touched on an example of this, as Canadian based, WealthSimple, launched a new crypto trading service.

As each of these companies develop and launch new services, the companies simultaneously become more comprehensive, and closely linked as competitors.  Whether looking for investment capabilities, savings accounts, crypto trading, pre-paid debit cards, etc. – Revolut and its competitors have you covered.

Looking beyond these two, and the increasing list of FinTech companies following suit, it would not be surprising to find truth in rumours that PayPal will soon join the fray.

Revolut

Founded in 2015, Revolut is a FinTech company, with operations based out of London, England.  In the time since launch, Revolut has developed a suite of services surrounding digital banking.  Adoption of these services has allowed the Revolut team to expand, totaling over 2000 employees, to date.

CEO, Nikolay Storonsky, currently oversees company operations.

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Regulation

Traditional Banks Ramp Up Custodial Services for Digital Assets

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Traditional Banks Ramp Up Custodial Services for Digital Assets

In recent weeks, we have seen an increase in the adoption of blockchain services, among traditional banks.  First, U.S. based banks were given the green light to custody cryptocurrencies by the Office of the Comptroller of the Currency (OCC).  Now, we learn that one of the largest banks in South Korea, KB Kookmin Bank, is already working to develop similar services.

Who’s Involved?

With regard to South Korea, the plan is for KB Kookmin Bank to begin offering custodial services for digital assets.  This is a group effort involving the following companies,

This collaboration is particularly noteworthy, as KB Kookmin Bank is not just any old bank.  They are currently the largest bank in South Korea.  Moves made by a bank of this stature are followed closely by many.  Although KB Kookmin Bank and its partners may be first to the table, expect to see others take a seat in the near future.

Future Asset Expansion

While initial services will centre on the custody of cryptocurrencies, it is believed that this support will eventually grow, encompassing various types of digital assets.  More specifically, it is expected that in time, these custodial services will support digital securities.

In commentary released by Hashed, this expansion of supported assets was touched upon.  Hashed states that through this collaboration, participants anticipate, “…that the digital asset industry will not only involve cryptocurrencies, but also other traditional assets such as real estate, artwork, and other reified rights that will be issued and traded on blockchain platforms.”

Although cryptocurrencies stand to benefit first, the development of such custodial services has the potential to transform and usher forth new growth among the digital securities sector.

Office of the Comptroller of the Currency

In the weeks preceding the news surrounding KB Kookmin Bank and its forthcoming custodial service, we saw the OCC release of an interpretive letter on the subject.

In this letter, the OCC breaks down, not only what digital assets are, but how banks can support the growing use.  The OCC summarized its stance, stating,

“The OCC recognizes that, as the financial markets become increasingly technological, there will likely be increasing need for banks and other service providers to leverage new technology and innovative ways to provide traditional services on behalf of customers. By providing such services, banks can continue to fulfill the financial intermediation function they have historically played in providing payment, loan and deposit services.”

It continued,

“…we conclude a national bank may provide these cryptocurrency custody services on behalf of customers, including by holding the unique cryptographic keys associated with cryptocurrency.  This letter also reaffirms the OCC’s position that national banks may provide permissible banking services to any lawful business they choose, including cryptocurrency businesses, so long as they effectively manage the risks and comply with applicable law.”

Bank Adoption

Which came first, the chicken? Or the egg?  This old saying could easily be applied to the current world of blockchain.  Are these traditional banks jumping on board the train due to the recent resurgence being seen in the sector?  Or is the sector surging due to banks jumping on board.  Regardless of the answer, signs of blockchain adoption within traditional industries is a definite positive.

Hopefully, this swing in sentiment among banks continues to gain momentum, as banks have not always viewed digital assets in a positive light.  Only months ago, we were reporting on difficulties being faced by German companies, as they were refused services by traditional banks.

KB Kookmin Bank

Founded in 2000, KB Kookmin Bank maintains operations in Seoul, South Korea.  Since launch, KB Kookmin Bank has grown to employ over 25,000, while providing customers on a global scale with access to commercial banking services.

CEO, Hur Yin, currently oversees company operations.

Office of the Comptroller of the Currency (OCC)

The OCC is a U.S. based regulatory body, tasked with supervising national banks.  This supervision is undertaken with the goal of ensuring fair and transparent financial services to all customers.

Acting Comptroller, Brian P. Brooks, currently oversees operations at the OCC.

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